Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1887-12-10

| the 1st day of January of each year. Said
bonds shall be signed by the President of
the Board of Supervisors, countersigned by
! the Clerk of the Board Of Supervisors, and
| Endorsed by the Treasurer, and shall have
the seal of the city and county affixed
| thereto. Coupons for the interest shall be
attached to each bond, so that they may be
removed without injury to the bond; said
! coupons, consecutively numbered, shall be
| signed by the Treasurer. 1t shall be the
! duty of the bookkeeper of the city and
| county, and the Treasurer, each, to keep a
| separate record of all bonds issued show
! ing the number, date, and amount of each
! bond, to whom issued, upon what claim,
and Its amount; and none of the claims
herein specified shall be iquidated or paid,
! except in the manner herein provided.
Section IS. The following claims shall
be received and funded under the proyi-
sions of this Act: First-All legal debts
or Liabilities against the county of Sacra-
mento, which may be unpaid and unpro-
Ylded for by this Act on the first dav of
January, 1859. The annual interest and
principal of all bonds issued for claims
mentioned in this section shall be paid
from the interest and sinking fund, as pro-
vided in Section 36, and in the manner
otherwise provided in this Act. Second
All legal debts or liabilities against the CITY
OF sacramento, which may be unpaid and
unprovided tor by this Act on the first dav
OF January, 1859. The annual interest and
principal of all bonds issued for claims
against said city shall be paid from the in
terest and sinking fund provided in Section
80, and in the manner otherwise provided
in this Act"
By Section q the salaries of certain of.
ficers are fixed, and it was declared that
these salaries shall be paid out of the salary
fund provided in the Act. {See Secs. 80, Sc,
Stats. 1858, =. 279.)
The salaries of the President. members
and clerk of the Board of Supervisors.
County Auditor and Treasurer, were to be
paid one-half out of the salary fund pro-
vlded for in Section 35, and one-half out of
the fund in Section SO of the Act, and the
salaries of the Sheriff, County Clerk, Asses
sor, District Attorney, County Judge and
Superintendent OF Public Schools, were to
be paid out of the salary fund provided for
in Section Sc.
By the last clause of Section "a it was
provided that " all municipal officers shall
be paid out of the salary fund provided for
in Section 50 of this Act"
Among the officers mentioned in Section
"a are clerk and engineer of the water
works. Laborer at water works is also
mentioned. The salary of the clerk is fixed
at 81, 800 per annum, of the engineer at the
same sum, and the pay of the laborer at
$40 per month. The Board of Supervisors
| IS by Section Of the Act empowered to
| elect clerk and engineer of water works
These are of the municipal officers who are
| to be paid out of the salary fund provided
in Section 50. The laborer of the water
works is doubtless to be paid out of the
same fund.
1t will be seen that all moneys collected
| by any ofhcer who has the control, collec-
| ton or custody OF any money collected for
| taxes, licenses, water rates, fees of office, or
any other account not otherwise provided
in the Act, are required to be paid into the
Treasury on the Saturday of each week
| Section 2S.) This duty is enforced under
the heaviest penalties, which are prescribed
by Section IS.
| 1t must be futher observed that the reve-
nues of the city and county are set apart
and appropriated to certain funds therein
mentioned. By Section 80 the revenue de-
rived from and within the city limits for
municipal purposes is to be set apart and
appropriated as follows:
First-Fifty-tive per cent to an interest
and sinking fund.
Second-Fifteen per cent. TO n salary
fund.
Third--Eight per cent to a school fund.
Fourth-Twenty-two per cent. to a con-
tingent fund.
a perusal Of Section Sc will show the
funds created by this Act, and the distribu-
ton to be made between them. But let it
be noted that of the sinking and interest
fund of Section 50 (55 per cent. of the reve-
nue. mentioned therein), it is enacted in
| these words, which shall be applied to
the payment of the annual interest of and
final redemption of bonds issued for city
| Indebtedness, in accordance with the pro-
| visions of this ct - (Sec "a
The most cursory perusal of Sections 80
and sc will show that the funds therein
mentioned were to be devoted strictly and
exclusively to the payment of the demands
on them as defined by the Act.
The revenue mentioned in Section So
derived from and within the city limits for
municipal purposes, is clearly defined by
Section 80 as follows: Taxes, licenses,
harbor dues, water rents and fines collected
in the Mayors Court, or otherwise" and
" when paid into the Treasury" they shall
be set apart and appropriated to the several
funds as set forth above
1t should be further noted that the an
nual interest and principal of all bonds is
sued for claims against the city of Sacra-
mento are by Section SO to be paid rom
the interest and sinking fund, provided in
Section 30 of the Act. By this means. the
interest and sinking fund thus created is
interest and principal of the bonds men
| toned
The plaintiff in this action is the holder
of such bonds issued under the Act of 1853.
The Act of 1883 was before this Court in
Meyer VS.. Brown, 65 Cal, $50, and it was
there held to be a contract between the
bOndholders and the city of Sacramento
which could not be changed 10 the hurt of
the bondholders by subsequent legislation
of any sort. The Court, in its opinion,
drawn up by Justice Ross, after quoting
several sections of the Act, among others
Section 50 aud referring to others, said
Having thus made provision for the
payment annually of the interest on the
bonds, and ultimately for their redemption,
the Legislature offered them in payment of
the legal claims against the old City Gov
eminent. The offer was accepted, and the
holders of the latter surrendered their
claims, in consideration of which the con-
solidated government issued to them its
bonds, pursuant to the provisions of the
Act. The bonds carried with them the
pledge of an annual tax for municipal pur-
poses, on all real and personal property
within the city limits, except such as is eX-
empt by law, of 100 cents on the 800, 55
per cent. of which to be set apart and APP
propriated to an interest and sinking fund
to be applied to the payment of the annual
interest upon the bonds, and to their final
redemption. The tax was the chief secu-
rity offered the creditors as an inducement
to accept the bonds in payment of their
claims. When the bonds for whose pay
ment, with interest, provision was thus
made, were issued and accepted by the
creditors of the old City Government a
contract was made as solemn and binding
and as much beyond subsequent legislation
as it would have been if made between pri-
vate persons. These views will be found
sustained and amplified in an able opinion
recently rendered by the Supreme Court of
the United States, in the case of Louisiana
VS.. Pilsbury, reported in 105 U. s., D. 27S.''
This should be regarded as settling the
law on this point.
Regarding it, then, as settled to be a con-
tract between the city and the bondholders,
the question arises as to the terms of this
contract. The point, then, to be consid-
cred is whether this contract extends to
and embraces within its terms the gross re-
ceipts from water rents, or does it only in
clude the net receipts after deducting sala-
ries, expenses, etc. ? This must be deter
mined by the language of the Act
The part of the Act to which our atten-
ton is particularly called is the first clause
of Section 80. That clause is as follows:
THE revenue derived from and within